I like the following long trading ideas in conjunction with further market strength. As I have discussed for several days now, though, below 1548 on the S&P 500 likely puts new long trades on hold. Nonetheless, being prepared for the next wave of breakout plays is imperative.
Stay alert, my friends.
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Both of the following stocks outperformed the market on Monday, with strong buy volume to boot. I am watching them for further strength this week.
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With less than two weeks to go until April, consider this a heads-up about one of the best seasonality plays I can find inside The PPT algorithm. Biotechnology firm Medivation has been up 100% of the time in the month of April, with 15 data points to boot. This stock has been a monster in recent years, as the first time I brought it to your attention in 2011 it was trading at $17.02, and is now at $45.05.
Beyond that, the average return for this stock in the month of April is over 17.5%. The evidence is right here, via screenshot courtesy of The PPT. No losing April’s for MDVN.
Furthermore, observing the daily chart below we can see that the stock has been struggling of late, in a clear corrective pattern since early-February. However, the stock gapped down on Monday and then reversed higher for a reasonably strong close.
In this context, after a downtrend, that candlestick for Monday can be seen as indicating an imminent bullish reversal; a hammer, hammering out a bottom, if you will.
When you couple this technical setup with the looming April seasonality, Medivation becomes an intriguing play to watch going forward.
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Headed into Thursday’s session, we continue to look at a resilient, albeit perhaps lethargic, market. While we are expectedly seeing leadership and breakouts rotate and become increasingly selective as the rally becomes obvious and quite mature in the short-term, there may still be enough stubborn bears in individual stocks to fuel a few more squeezes. I am aware of the broad market sentiment indicators, and all of the statistics being thrown around about correlations and divergences which have frustrated top-down traders for virtually all of 2013.
But, here, I am referring to individual setups where numerous short-sellers are clearly out of position and praying for a broad market pullback. Specifically, the following three charts are all technically sound, ripe for further breakouts higher, and quite heavily-shorted to boot. Bears are out of position in these names, and if the broad market continues its resilience or even grinds sideways yet, I like these as long ideas to punish stubborn shorts.
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Running through my screens tonight, the uptick in buying volume in many semiconductor stocks over the past few sessions has certainly caught my eye. I continue to be on watch for sector and stock rotations in lieu of trying to pinpoint an elusive broad market top.
As a result, here are several long ideas with explanations in the semiconductor sector that I like on further strength.
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Courtesy of The PPT algorithm, and one of my favorite saved screens, here are ten heavily-shorted stocks acting well today, ripe for further short squeezes higher into the close.
Click to Enlarge
